NCUA Simplifies Share Insurance Rules for Trust Accounts

The National Credit Union Administration (NCUA) has finalized changes to the share insurance rules for trust accounts under 12 Code of Federal Regulations (CFR) Part 745. The final rule is intended to simplify the calculation of share insurance coverage and align NCUA rules more closely with the Federal Deposit Insurance Corporation’s (FDIC) treatment of trust accounts. The trust account changes become effective December 1, 2026.

What is changing?

Currently, NCUA has separate share insurance categories and calculation rules for revocable and irrevocable trust accounts. The final rule establishes a single “trust accounts” category. The new rule generally applies the same basic calculation to informal revocable trusts, formal revocable trusts, and irrevocable trusts.

Beginning December 1, 2026, each grantor’s trust accounts will generally be insured up to $250,000 per eligible beneficiary, subject to a maximum of $1.25 million per grantor, regardless of the type of trust. The final rule eliminates the separate formulas currently used for revocable trusts with more than five beneficiaries and for irrevocable trusts.

For example, an individual grantor with four beneficiaries could have up to $1 million in share insurance coverage for trust funds, calculated at $250,000 per beneficiary. If the trust account contains $2 million, $1 million would be uninsured.

For a jointly owned trust account with two grantors and four beneficiaries, each grantor could potentially receive up to $1 million in coverage. As a result, a $2 million trust account could potentially be fully insured, assuming all applicable requirements are satisfied.

Why this matters to credit unions

The simplified calculation may change the amount of share insurance available to some members. Credit unions should identify members with significant balances in trust accounts and evaluate whether the new calculation could affect their coverage when the rule takes effect.

Credit unions should consider:

• Identifying members with revocable and irrevocable trust accounts.
• Reviewing current balances and beneficiary information.
• Evaluating how coverage will be calculated under the new rules.
• Identifying members who may become uninsured or underinsured as a result of the change.
• Reviewing procedures and systems used to calculate and communicate share insurance coverage.
• Training appropriate staff on the new trust account rules before December 1, 2026.

NCUA states that the changes are intended to make trust account coverage easier to understand and apply, while also facilitating more timely share insurance determinations following a credit union’s liquidation.

Credit unions should begin preparing for the December 1, 2026, effective date by reviewing trust account procedures, systems, training, and member communications. Credit unions should also identify accounts that may be affected by the new calculation so potential coverage changes can be addressed before the rule takes effect.